Patent goes off, cut prices come on

Here’s some good news for those shelling out a fortune to buy essential medicines. With Indian companies setting their eyes on the off-patent drugs market, the prices of medicines will witness a drastic fall. According to estimates, generic or copycat drugs may be priced 90 per cent lower than the existing ones. For that, the local pharma companies will have to seek a licence under the Drugs and Cosmetics Act to produce a generic version of a patented product before the patent expires or get a compulsory licence to offer drugs at affordable prices. Alternatively, they can tap the First-To-File (FTF) option that allows pharma companies to challenge a patent and get exclusive marketing rights (in the US) for 180 days before the market is thrown open to other players.

“There are several drugs that are going off-patent very soon and we sense there’s a tremendous business opportunity. For any given drug, a generic drug will be 90-95 per cent cheaper than the original,” says Abhijit Mukherjee, president of Global Generics at Dr Reddy’s Laboratories Ltd’s (DRL), which has more than seven FTFs covering multiple therapeutic areas.

Natco Pharma’s anti-cancer drug Nexavar  is a classic example of low-cost generic drugs. While the innovator company Bayer Inc sells a 120-tablet pack at `2.84 lakh, Natco has priced its offering 97 per cent lower at ` 8,800, triggering a price war. Last month, it also launched blood cancer drug Dasatinib at `9,000 for a month’s supply against Bristol Myers Squibb’s original drug Sprycle, which sells at `1.5 lakh.

Natco is not the only one. Last week, DRL launched Lipitor, a cholesterol-lowering drug, in the US at about 95 per cent lower than what the innovator company Pfizer Inc was offering.

“Indian pharma firms have the ability and technology to manufacture products of international standards. They also have the ability to make biosimilars, which cost one-fifth that of the original drugs. Hence they are perfectly poised to make generic drugs of the highest standard at an affordable price,” explains Dr Shiv Kumar, Department of Cardiology, Apollo Hospitals, adding, “MNCs, in contrast, would never venture into the generic segment because it won’t make business sense to them.”

The segments where generic drugs are likely to be available are antibiotics, antacids, pain killers, hypertension, diabetes and all types of cancers. According to Price WaterhouseCoopers, India’s healthcare sector will touch $40 billion by 2o12, with 80 per cent of the health expenditure being spent through personal resources. Of this, 30-40 per cent is spent on medicines alone. If one also considers that over 50.8 million Indians are diabetic and one of every four cervical cancer patients is an Indian, you realize just how many people are likely to be affected by the availability of cheaper drugs.

“India is often considered the diabetes capital of the world. Similarly, the number of patients suffering from cancer is on the rise. If Indian firms can offer drugs at lower prices, several patients can be cured,” reasons Dr Shashidhar Kamineni, founder, Kamineni Hospitals.

Home-grown companies like the Pune-based Glenmark and Bangalore-based Biocon have shown promise not only in innovating existing drugs but also developing new drugs. During 2011-12, Glenmark chanelled about 60 per cent of its total R&D expenditure towards new products, while the remaining 40 per cent was spent on process innovation. The company completed the Phase I clinical trial of GRC 15300, a first-in-class TRPV3 inhibitor for treatment of pain. For its part, Biocon completed Phase III studies on Itolizumab (psoriasis molecule), the anti-CD6 molecule targeted at autoimmune disorders like plaque psoriasis and rheumatoid arthritis.

“As drug development becomes an expensive, high risk endeavour, we are leveraging our robust R&D engine to deliver affordable innovation,” says Kiran Mazumdar Shaw, CMD, Biocon, which is famous for its insulin drug. The company recently also launched the world’s first humanized anti-EGFR monoclonal antibody, Nimotuzumab—for the treatment of head/neck cancer and is undertaking clinical trials to assess the therapeutic potential of the product in glioma (brain tumours) and NSCLC (lung cancer). Biocon is also developing monoclonal antibodies for hematological malignancies, inflammation and autoimmune disorders.

Then there’s Piramal Healthcare, which has got an okay from the Drugs Controller-General of India to conduct Phase-II clinical trials of the cancer drug P276 in combination with chemoradiation for head and neck cancer. Piramal completed its Phase-I studies in Canada and India and plans to initiate Phase III in 2013. Head and neck cancer is very common in India with 1.5 to 2 lakh new cases identified every year. Radiation-induced mucositis occurs in 40-65 per cent of patients treated for head and neck cancer. “With P276, we hope to benefit patients both clinically, and in terms of a better quality of life,” explains Dr Swati Piramal, vice-chairperson, Piramal Healthcare.

To start with, the cheaper drugs should help.